HIGH COURT OF DELHI
S S KHOSLA
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(1.) The petitioner claims quashing of an order of the Central Government
acting as reviewing authority in terms of Section 129-D of the Customs Act, 1962
(2.) Briefly the facts are that the petitioner, a firm, carrying on business
at the port of Kandla at the material times was agent of the vessel M.V.
"Southern Ace" (hereinafter referred to as "the vessel"). It filed a bill of
landing for 3,296.801 MTs of Phosphoric Acid, landed at the Port. The vessel
could not be berthed at port on account of its size and having regard to draft
restrictions. The imported material had to be thus pumped into the shore tanks
of the concerned agency namely the importer IFFCO. A certificate was issued on
20.11.1982 by M/s Ericson and Richards as to the quantities. According to this
report (hereinafter referred to as "the Ullage Report"), the quantity ultimately
pumped into the shore tanks were 3103 MT. Though the bill of lading or the
manifest of the vessel showed 3296.801 MT of phosphoric acid, the bill declared
affirmed 3262 MT and ultimately 3103.152 MT was found as the correct figure in
the Ullage report.
(3.) The customs authorities issued a show cause notice calling upon the
petitioner to satisfy it as to why penalty in terms of Section 116 of the Act
ought not be imposed for the short landed goods. The proceedings were resisted;
eventually an order was made by imposing a penalty of Rs. 4,30,000/- upon the
petitioner, on 30.9.1998. This order was appealed against; the Collector of
Customs (Appeals) by order dated 1.9.1989 reversed the Adjudicatory order and
remitted the matter for fresh consideration, to the adjudicating authority i.e.
Deputy Collector of Customs at Kandla. The Deputy Collector confirmed the
previous findings regarding penalty of Rs.4,30,000/- rejecting the Ullage report
and holding that only an allowance of 2% could be accepted by way of ocean loss,
since that was the permissible limit prescribed by executive instructions. He
however noticed the peculiar nature of the goods and the tendency of sludge
formation during long voyage.;
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